1. The present First Appeal (FA) has been filed by the Appellant(s) against Respondent(s) as detailed above, under section 51 of Consumer Protection Act 2019, against the order dated 20.04.2023 of the State Consumer Disputes Redressal Commission, Chhattisgarh, (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) No. 86 of 2017 inter alia praying for:-

1. Set-aside order dated 20.02.2023 and grant an opportunity to the Appellant to file its written statement.
2. Set aside order dated 20.04.2023 passed by the State Commission, in CC No. 86/2017.

2. The Appellant(s) was the OP and the respondent(s) was the Complainant in the said CC/86/2017 before the State Commission. Notice was issued to the Respondent(s) on 03.07.2023. Delay in filing the RP is condoned after considering the reasons stated in IA/8119/2023. Parties filed Written Arguments/Synopsis on 19.01.2024 (Appellant) and 16.11.2023 (Respondent) respectively.

3. Brief facts of the case, as emerged from the FA, Order of the State Commission and other case records are that: -

1. Husband of the Complainant, late Mr. Pramod Kumar Singhania obtained two life insurance policies bearing no. 358148559 and 358148555 commenced on 23.04.2010 and 28.04.2010 respectively. Insured died on 12.08.2012. Complainant, being the nominee in both the policies submitted the claim along with all original documents. However, the life assured died within three years of taking the policies which made it an early claim warranting an investigation under Section 45 of the Insurance Act. After going through the documents filed by the Respondent, it is seen on record that the patient was Diabetic and has High Blood Pressure and had undergone Coronary Angiogram in the year 2007. Insurance company repudiated the claim vide letter dated 26.11.2016 after two years of submission of the claim on the ground of concealment of facts regarding condition of health of the insured at the time of filing proposal form for obtaining insurance policies.

2. The Complainant further averred that her husband had undergone requisite medical tests and investigations prior to issuance of the policy and after due consideration of the facts and application of mind on the medical condition of the proposed insured, the policies were issued.  

3. The Complainant asked for the claim amounting total Rs.43,80,000/- (Rs.20,00,000/- + Rs.15,00,000/-) along with benefits accrues as bonus in approximately Rs.3,30,300/- along with the interest @12% from the date of claim, Rs.5,00,000/- for delay in settlement of claim and Rs.50,000/- in making efforts for settlement of claim under policies.

4. Vide Order dated 20.04.2023, the State Commission has allowed the complaint with the following directions to the Opposite Party:-

“(i) The Opposite Party Insurance Company shall pay the complainant the amount of insurance claim i.e. sum assured under both the insurance policies Rs.20,00,000/- and Rs.15,00,000/- total Rs.35,00,000/-

(ii) All the benefits and bonus accrued to the insurance policies in question shall also be paid by the Opposite Party Insurance Corporation to the complainant.

(iii) The above amount shall be paid by the Opposite Party Insurance Company to the Complainant with interest @6% p.a. from the date of filing this complaint i.e. 24.11.2017.

(iv) The Opposite Party Insurance Company shall pay to the Complainant Rs.10,000/- as compensation for mental agony suffered by her and Rs.5,000/- as cost of litigation.

(v) The above all the amount shall be payable within one month from the date of this order.”

5. Appellant(s) have challenged the Order dated 20.04.2023 of the State Commission mainly/inter alia on following grounds:

1. The order dated 20.04.2023 passed by the State Commission is contrary to the terms and conditions of the policy and as such is contrary to law and facts of the case established on record and is passed without affording an opportunity to put forth its defense.

2. The State Commission has wrongly and illegally allowed the complaint of the Respondent and has wrongly directed the Appellant to pay the insured amount in spite of the fact that it was proved beyond any doubt that the Life Assured was suffering from various diseases at the time of taking the policies and has concealed the same at the time of filing proposal of the policies.

3. The State Commission failed to appreciate that the contract of Insurance is based on the Principle of UBREMMA FIDES i.e. utmost good faith and the Life Assured did not follow these rules and gave false answers in respect of his pre-existing disease at the time of purchasing the policies.

4. The State Commission overstepped its Jurisdiction by granting reliefs to the Respondent in spite of the fact that there was no deficiency in service on the part of the Appellant and even the right to file written statement was wrongly closed.

6. Heard learned counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the FA, based on their FA/Reply, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

              6.1       In addition to the averments made under the grounds (para 6), the petitioner contended that the Appellant was not served by the State                      Commission when the Respondents’ complaint was dismissed. The Commission heard the appeal on 15.07.2022 and pronounced the                      judgement on 15.12.2022, with the certified copy received by the State Commission on 31.01.2023. The case was first taken up on                             02.02.2023 without the Appellant’s knowledge. On 20.02.2023, the Appellant's counsel appeared before the State Commission and closed                             the right to file a written statement without granting an opportunity. The Judgment dated 31.01.2023 became known to the Appellant only                             on that date, and the written statement could have been filed within 30 days from the date of receipt of the same. The principles of Natural                             Justice were not followed by the State Commission in closing the Appellant's right to file written submissions. Therefore, the order dated                      20.04.2023 needs to be set aside, and the Appellant should be granted an opportunity to present its defense before the final order is                             pronounced by the State Commission.

                     6.2       On the other hand, Respondent contended that the repudiation was communicated after a delay of more than two years. In October,                             2017 a Consumer Complaint was filed by the Complainant/Respondent in the State Commission and was dismissed in limine on the                                    ground that complaint is barred by limitation whereas the National Commission set aside the order of the State Commission and held                            that the complaint was well within limitation because the cause of action for a Consumer Complaint commences from the date of                                    repudiation of the insurance claim. In support of her contentions, Respondent relied upon the judgement of Hon’ble Supreme Court in                                    the New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. decided on 04.03.2020 in Civil Appeal No. 10941-                                   10942 of 2023.

7. It is contended by the appellant LIC is that they were not allowed to file their written version before the State Commission. Earlier this case came up before this Commission vide First Appeal No. 698 of 2018 and vide order dated 28.11.2022, the appeal was allowed, the complaint was restored and State Commission was directed to decide it on merits. The Insurance Company was directed to file its written version within statutory period reckoned from the date of the order i.e. 28.11.2022 with the State Commission and parties were directed to appear before the State Commission on 15.12.2022 (date 15.12.2022 having been added in handwriting later on). The free certified copy stamp appearing on this order show that the free certified copy was dispatched on 28.12.2022. However, it is contended by the learned counsel for the appellant that they received this order (that is the free certified copy) on 31.01.2023 only. As the stamp of the Registry specifically stated that this order was dispatched on 28.12.2022, and there would be a normal presumption of its delivery within about one week. In view of the specific contention of the appellant that they got it on 31.01.2023, the records of the Registry of this Commission with respect to dispatch of this order were called for, which showed that this order was actually dispatched by the Registry on 25.01.2023. Hence prima facie the contention of the appellant Insurance Company that they got this order on 31.01.2023 appears to be correct and is accepted. In view of the foregoing, we agree with the contentions of the appellant herein that they could not have appeared before the State Commission on 15.12.2022 as even the first free certified copy was actually dispatched on 25.01.2023.

8. It is admitted by the learned counsel for the appellant that they never filed the written version before the State Commission, not even within the 45 days counted from the date of the first hearing before the State Commission i.e. 31.01.2023. Hence, keeping in view the law laid down by Hon’ble Supreme Court in “New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd.) and other connected matters, (2020) 5 SCC 757” at this stage they cannot be allowed to file the written version. Hence, we find no reasons to interfere with the orders of the State Commission dated 20.02.2023. A perusal of the orders of the State Commission (para 7) shows that the State Commission has passed the impugned order after considering the written arguments filed by the opposite party i.e. appellant herein, but without considering the documents filed along with the same, which is in view of their written version having been not accepted.

9. In this case, the claim of the Respondent was repudiated by the Petitioner Insurance Company vide repudiation letter dated 26.11.2016 on the grounds of suppression of material facts in the proposal form. Extract of relevant portions of the repudiation letter is extracted below:

“We therefore state that answers in question no. 11 (a,b,c) and (e) have been incorrectly answered, and we have documents to believe that the insured was suffering from Diabetes, High blood pressure and has under gone coronary angiogram in year 2007. A Discharge summary from Apollo Hospital Sikandrabad, UHID No. APC 20000004533 and I.P. No. APC 21P 786 the patient was admitted from 22.07.2010 to 29.07.2010, according to which cardiomyopathy, type II, diabetes mellitus, hypertension and was having difficulties in breaking from 2 years, and has aggravated from three months. That on 19.07.2010 in Eco Dilated LV, Global Hypokinasia, Severe LV Dysfunction and Diastolic Dysfunction were found and CRTP Implantation was carried out on 23.07.2010. In discharge summary it is mentioned that the patient was suffering from diabetes type II, since 2007 and was treated for hypertension.  In 2007, angiogram was carried out at Apollo Hospital Vikrampuri, and according to documents issued from Apollo Hospital Vikrampuri angiogram was carried on again on 21.07.2010.

            There it is proved that while submitting proposal form for policies that insured has deliberately concealed the facts relating to his status of health, there we repudiate the claim under policies, and claims under policies are repudiated on grounds of concealment of facts while submitting the proposals for policies.”

10.  The Respondent had contended that the deceased had undergone requisite medical tests and investigations prior to acceptance of the proposal form. As the right of Insurance Company to file written version was closed, the State Commission considered only the written arguments filed by the Insurance Company without considering the documents filed by it. No doubt suppression of material facts in the proposal form entitles the Insurance Company to repudiate the claim, but the onus to prove such suppression is on the Insurance Company. In this case, the Insurance Company could not adduce any evidence before the State Commission on account of its failure to file written version within the statutorily prescribed period. State Commission, after considering the evidence before it, the provisions of Insurance Act, 1938 and rival contentions of the parties, have allowed the complaint. Extract of relevant paras of orders of State Commission is reproduced below:

“11. Having considered the above arguments of the both parties and perusing the record, the admitted picture of facts which emerges as a whole is that two policies vide policy No.358148559 for sum insured Rs.20,00,000/- (Twenty Lacs) commencing from 23.04.2010 and policy No.358148555 for the sum assured Rs.15,00,000/- commencing from 28.04.2010 were issued by the opposite party insurance in the name of the deceased. The insured Pramod Kumar Singhania died on 12.08.2012 i.e. after about two years and four months after taking the insurance policies.

12. Regarding the cause of death nothing definite or substantive evidence is available on record. Only in the document filed by the complainant herself obtained under RTI, in the Agent's Confidential Report the cause of death is written as heart fail. In the Medical Attendant's Report the column of cause of death is left blank and in fact almost all the columns regarding health are left blank by the concerned Doctor, who is ENT Specialist as per seal put below his signature. In the record only repudiation letter is available in which at page No.1 relevant column of personal information filled by the insured has been mentioned and in page No.2 it has been mentioned that the deceased was suffering from diabetes and high blood pressure and he underwent for coronary angiogram in the year 2007. Other details regarding his treatment and admission in the hospital between 22.07.2010 to 29.07.2010 has also been mentioned. It was also mentioned in the said repudiation letter that all these details were knowingly concealed by the deceased insured at the time of filling proposal form for obtaining insurance policies. In the letter of repudiation also there is no mention of cause of death. In this situation, in absence of any cogent and conclusive evidence it is not possible to draw any definite opinion regarding cause of death or concealment of facts regarding previous record of illness or hospitalization and as to whether the so called concealed facts were proximate cause of death or not.

13. The complainant in her affidavit filed in support of the complaint in paragraph No.6 has specifically stated that "while insuring the insured the Corporation has also obtained medical fitness certificate at the time of submission of proposals and policies were issued by the Corporation after due consideration of fact and application of mind by the person issuing the policies". This fact has also not been rebutted by the opposite party and we have no reason to disbelieve this statement of the complainant.

14. Learned counsel for the opposite party has argued that special enquiry was conducted as per provisions of Section 45 of the Insurance Act 1938 as the insured died within three years of commencement of the insurance policies.

15. Section 45 of the Insurance Act 1938 as amended by Insurance Laws

(Amendment) Act, 2015 envisaged as follows:-

"45. (1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.

(2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:

       Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.

       Explanation I. For the purposes of this sub-section, the expression "fraud" means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:-

       (a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;

       (b) the active concealment of a fact by the insured having knowledge or belief of the fact;

       (c) any other act fitted to deceive; and

       (d) any such act or omission as the law specially declares to be fraudulent."

       Of course Section 45 of the Insurance Act 1938, as amended, starts with "No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy" but in the facts of the present case the policies were issued by the opposite party insurance corporation on 23.04.2010 and 28.04.2010 and insured Pramod Kumar Singhania died on 12.08.2012. Thus the commencement of the insurance policies and death of the insured both happened prior to the enforcement of the aforesaid amendment in the Insurance Act 1938.

16. In the instant case the insured died after about two years and four months after taking the insurance policies and before enforcement of Insurance Laws (Amendment) Act, 2015 the provisions under Section 45 of the Insurance Act 1938 were as under: -

“45. Policy not to be called in question on ground of mis- statement after two years. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose:

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal."

            Thus as per section 45 of the Insurance Act 1938 before enforcement of Insurance Laws (Amendment) Act, 2015 clearly envisaged that no policy shall be called in question on the ground of mis-statement after two years of commencement of the policy. In the instant case the insured died after about two years and four months of commencement of the policy, hence the policy cannot be called in question on the ground of mis-statement by the insured. Therefore, we are of the considered view that the opposite party Life Insurance Corporation of India ought to have paid the insurance claim and in repudiating the same the opposite party has committed deficiency in service, hence the complaint needs to be allowed with directions to the opposite party for payment of amount of insurance claim.”

11. State Commission has given a well-reasoned order and we are in agreement with its observations/findings. There is no illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the order dated 20.04.2023 is upheld. Accordingly, the FA is dismissed.

12. The pending IAs in the case, if any, also stand disposed off.